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Fintech, or financial technology is altering the methods of financial services and banking processes. With the advancement of technology, the finance sector is implementing innovative and advanced systems into personal and commercial finance. These technological advancements allow for a much more efficient approach to banking, especially in the startup industry.

Fintech has grown exponentially since the internet and mobile revolution. For new startups in the high tech sector, the advancement of financial technology and the adaptation to a startup’s needs can greatly contribute to its success.

Let’s take a deeper look into the unique banking needs and special features of the startup:

On Boarding – It’s important for a startup to set up an account quickly and hassle-free. The on boarding process includes providing a list of required documents including a business plan, reference letter, and corporate documents among others. Processing these documents can take a long time which most startups don’t have. Therefore it’s important for a bank or a Fintech company to provide an efficient on-boarding process that allows an account to be established in less than a week.

Mobile Banking – Startups require advanced banking options via mobile device. It’s surprising that many banks still do not offer a mobile app or a smooth mobile site. It’s crucial for startups to have the ability to complete transactions easily from a mobile site or application. Banks need to adapt to more advanced innovations in technology and offer features like fingerprint log in, facial and voice recognition, one click actions, lower rates, and top notch customer support. Banks that don’t ‘catch up’ with the times won’t succeed with their high tech clients.

Diverse Range of Payment Methods – Like most business, the high tech company needs a range of payment cards. They need an easy way to pay their internet providers, PayPal accounts, and much more. Plus, for startups with employees worldwide they need the option of obtaining credit cards, debit cards, and pre-payment cards.

Easy Payment Authorizations – Startups usually need a fast and easy payment authorization process. Many high tech startups have their authorized signatories located in different parts of the world. It’s therefore crucial that these companies have the ability to conduct fast and easy payment approvals.

In addition, the banking system should be able to provide cross border banking solutions for the payment signatory group

Expert Customer Support – High tech companies are known for having employees around the world speaking a variety of different languages. With English being the most common language, there must be English customer service available. Usually there are several methods of support including a personal support manager, call center, live chat, fast answers, and quick troubleshooting guidance.

Looking forward: Banks and High Tech Companies in 2018

Financial technology has exploded in the last few years and continues to grow. Today, mobile applications, fast payment transactions, and blockchain are in widespread use and financial institutions need to get on board and stay up to date with their customers. Banks, Electronic Money Institutions (EMIs), and other financial bodies must alter their services accordingly and adapt to the high tech climate or they will not survive.

GBO will assist you to find the best business bank account for your startup in various banks and financial institutions around the world.

We are asked many time what is best bank for startups, but there is no one answer but it depends of many variables.

Main features of the best start up business bank account

Multi-Currency Transfers
Many high tech startups outsource employees and have clients, affiliates, and representatives worldwide. This creates the need to send and receive money globally, across multiple currencies. Startups need to transact these payments swiftly and easily.

24/7 Customer Support in English
Banks need to provide customer support in English, around the clock. Many starups companies have employees and affiliates across the globe and need customer support in this common language.

Fast Payment Authorizations
Startups need to be able to approve payments swiftly and easily. With the possibility of different employees in the finance department located in different countries, startups need a fast way to authorize and complete their banking activities

Tailored and Customized Fees
Some of the best business bank accounts for startups offer set of fees that outfitted to their specific requirements. Fees can differ drastically depending on the risk factor of the startup.

By the eyes of the bank, there are some of the most critical questions when doing the on-boarding process of a new account:

What is the activity of the hi-tech company? Banks define and determine what industries they like and dislike and evaluate the risk of the client by its’ industry. For example, a bank can decide that ecommerce activity is too risk for him and outcome is that the bank will refuse to open bank accounts to eCommerce companies. While other banks feel comfortable with this industry.

How the company is registered, jurisdiction? Banks can decide that they don’t accept any company that is registered in an offshore jurisdiction, no matters what is the line of business.

Banks can decide that they don’t accept ant complex company structure, meaning if there is a mother holding company, the use of nominees directors or shareholders

Who are the shareholders, directors and the UBO (ultimate beneficiary owners)? All banks work under regulation –local or global. There many restrictions regarding the identity of the shareholders and directors like black list, problematic past, PEP (Political Exposure Persons) and so.

Where are the main clients and suppliers? Banks can refuse to get payments or to send payments to restricted countries, for example, if the main suppliers of a company are located in Korea, then banks will not authorized the transfers. If banks see that your main customers and suppliers are in black listed countries or centuries with high risk, it will refuse to assist you

Startup bank account requirements:

In order to start the process of the KYC (Know your Clients) for the opening of the account, Startup Company will have to submit the bank supporting documents such as: memorandum of association, certificate of incorporation, passports of the shareholders and directors, certificate of incumbency, company articles, and board resolution. Business plan maybe requested too in some banks.

When you’re ready to get your startup business off the ground, finding the right bank to fit your needs is an important first step. Choosing a bank is a super important because they’ll be with you for long time, and as your startup grows you’ll need a bank that understand your needs and with the expertise to help you succeed.

When it comes to finding the right bank for your startup though, not all banks are created equal. Some banks have better offering and management plans for startups, and it’s a good idea to bank with one of these companies instead of just choosing the bank down the street.

It sounds quite easy to open start up business account but it is not such a simple process as banks may have many questions and clarifications at the early process, or at the on boarding process a of a new customer as we seen above.

What is the Best Bank for Startups?

All businesses need a corporate business account to operate and startups are no exception. When choosing the best business bank for startups you have many options. The needs of a startup business are greater than an established company or individual bank account. Startup bank accounts require careful and thorough attention as the business finds its feet. So what criteria do you use to find that perfect financial institution for your start up business banking account? Startups need a bank that is convenient, offers excellent services, provides you with options for mobile banking, apps, currency exchange and fair fees.

Although different startups have different banking needs there are some general requirements that all startup bank accounts need:

The best business bank for startups will understand your business activities

Your bank needs to accept and understand your business and what it does. The bank should know where your suppliers and clients are located, what will be the average amounts transferred in and out of the business account and to whom. If your bank has no interest in your startup’s activities then you will have problems in the future.

A startup business account must be eligible to operate in your jurisdiction

Confirm with your bank that there are no issues involving the jurisdiction where your company is incorporated. There are many legal issues surrounding the operation of companies registered offshore and some banking establishments disapprove and have policies preventing transactions in these jurisdictions. There are new anti-money laundering laws that can prohibit offshore companies from opening business accounts in Europe at certain banks. It is critical to verify the legal aspects of your startup account before committing to a bank.

Are small or large banks best for startup businesses?

Larger banks can offer innovative new banking features like mobile and P2P banking. Larger banks have more ATMs and more branches. The larger banks are also less vulnerable to changes in the economy thanks to legal changes made after 2008. Although they are not completely without risk the larger banks do offer security. With their extensive capital large banks can afford the latest banking systems and 24/7 customer support in multiple languages.

On the downside the size of larger banks that are spread across the globe can have negative aspects as well like higher fees and a less personal approach. Their large platform means less flexibility on fees and a one-size-fits-all approach that doesn’t handle issues case-by-case.

The importance of finding the best bank for startups

Working with the right bank from the beginning will save you inconvenience and complications in the long run. In the past banks would seek out any new customers no matter their size or sector. In today’s world regulations limit the type of customer and the type of services banks can deal with. For example banks in Europe and the US have regulations about the type of industries they can deal with, the size of the businesses, jurisdictions and other factors. This makes selecting a startup bank account even more complex.

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